If you’re in the market for a new vehicle, you have a big decision to make. Should you finance and buy a vehicle or lease one instead? Both will allow you to drive a new vehicle off the lot, but that’s where the similarities end. Compare buying vs. leasing, so you can choose the right option for your next vehicle.
When comparing buying and leasing, you’ll notice that the monthly payments differ. If you finance a car, you’ll pay the entire cost, plus interest.
On the other hand, you’ll pay finance charges and the cost of depreciation when leasing a car. Basically, you’ll make up the difference between how much the car was worth when you leased it and how much it will be worth when you return it.
Because you aren’t financing the entire cost of the vehicle, lease payments are generally more affordable. That means you can go with a higher trim level when leasing while staying within your budget.
If you lease a vehicle, you’ll drive a late model car that’s likely under warranty. Also, the lease will end before the car has lots of miles on it, so you’re unlikely to encounter expensive repairs.
As the owner of a vehicle, you can end up paying out of pocket for expensive maintenance needs, especially if you drive the car for the long term. You will get the benefit of the manufacturer’s warranty, but once it expires, you’ll need to take care of repairs and maintenance yourself.
Mileage Limits for Buying and Leasing
When you buy a vehicle, you can drive it as much or as little as you want. However, leasing is a bit different. Leases have mileage limits, and you’ll have to pay a penalty if you go over. Because of that, you need to keep track of your mileage and be mindful when taking long trips.
Wear and Tear Penalties
If you own a vehicle, you want to keep it in great condition to maintain its trade value. However, you don’t have to worry about a penalty if it has excessive wear and tear. On the other hand, you can get penalized for wear and tear when you lease. Before leasing, speak to the team at the dealership to learn the wear and tear guidelines.
One of the best things about owning a car is it’s yours, so you can do anything you want with it. You can customize it as much as you want without any worries. In fact, some of the modifications could even increase the value if you find an interested buyer.
You don’t have that freedom with leasing. At the end of the lease, you need to bring the car back in the same condition it was in when it initially left the dealership. If you like to modify your vehicles, leasing likely isn’t for you.
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Getting a New Car
As the owner of a vehicle, you can trade it in or sell it at any time, even if the loan isn’t fully paid. Then, you’ll use the trade-in or sale value to pay off the loan.
However, you’ll have to pay early termination fees if you want to get out of a lease early. Because of that, it’s important to choose a car that you want to drive for the next two to three years.
However, when you reach the end of your lease, you just need to bring it back to the dealership and pick another vehicle. That’s easier than trading in or selling a car. If you want to move from one car to another with ease, leasing could be the right option.
As you can see, there are benefits of buying and leasing. If you want low monthly payments, less maintenance, and easy trade-ins, leasing is a great option. However, buying is the right choice if you prefer customizing your car and don’t want to worry about mileage limits or wear and tear.
Allen Honda in College Station, Texas, has vehicles available for sale and lease. Stop by to go over your options. Then, fill out the paperwork to buy or lease your new vehicle.
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